Areva - Reference Document 2016

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BUSINESS OVERVIEW

6.4 Operations

Note: Due to the decisions described above and pursuant to IFRS 5, the Wind Energy, Solar Energy and Energy Storage businesses made no contribution to the group’s intermediate balances or revenue. Despite the decision to shut down the Bioenergy operations, they remained within the consolidation scope of the group’s intermediate balances and consolidated revenue in 2016; the final shutdown of the business will not be completely effective until the last project has been completed.

market using electrolysis technology. The company is based in France and operates an engineering and electrolyzer production site in Ulis. Themarket for hydrogen production by electrolysis, traditionally focused on industrial applications, is evolving with the opening of hydrogen vehicle supply stations. Other applications, such as power-to-gas, offer additional and important avenues for this business. Other energy storage operations Energy storage operations other than PEM electrolysis fall under the responsibility of AREVA’s Research, Development and Innovation Department, to speed up development of related technology under collaborative programs. These operations mainly concern the development of a continuous flow battery technology, with operation of the first 150-kW prototype starting in 2016. Solar energy As a reminder, in view of the very unfavorable market conditions for concentrated solar power, AREVA had decided in August 2014 to stop the Solar Energy operations at the end of projects nearing completion, unless a full takeover bid was received in the short term. Unfortunately, detailed discussions conducted in 2015 with potential buyers did not result in an agreement. Consequently, it was decided to discontinue these operations completely. In order to shut down operations, an agreement was reached in December 2015 between AREVA and its customer Reliance Power for the early termination of the concentrated solar power plant project built by AREVA for Reliance in the State of Rajasthan, India. The agreement officially transfers the solar field in as-is condition to Reliance, along with the maintenance and operation of the power plant. This agreement was effectively executed on February 22, 2016, releasing both parties from their respective obligations. As a result of this termination and the absence of any orders in backlog, this decision marks the end of AREVA’s involvement in any solar energy operation and the discontinuation of that business. Operations and highlights In offshore wind, on June 17, 2016, Gamesa and AREVA signed an amendment to the shareholders’ agreement for Adwen, a joint venture in offshore wind energy held in equal shares by the two groups. Through that amendment, AREVA had three months to either sell its interest in Adwen to Gamesa or sell 100% of the shares in Adwen to an independent investor having made a more attractive firm offer during that period. At the end of the three-month period, and in the absence of an attractive offer from a third party, the Board of Directors of AREVA SA decided to authorize Management to exercise the option to sell its interest in Adwen to Gamesa. This option, which was exercised on September 14, 2016, closed on January 5, 2017 with Gamesa’s purchase of the 50% interest in Adwen held by AREVA. This transaction allowed the AREVA group to: 6.4.3.2.3. 6.4.3.2.4. Wind energy p limit and cap for the long term the amount of cash disbursements related to projects in operation and in the installation phase; p strengthen Adwen’s operations through a stable shareholding structure. In particular, Gamesa is aware of commitments made by Adwen under requests for proposals concerning offshore wind power generation inmetropolitan France. Adwen will continue to carry these commitments. p maximize the value of the Adwen shares sold;

6.4.3.2.1.

Bioenergy

Operations and highlights

BIOENERGY EUROPE In 2016, the principal operating activity of the Bioenergy Europe entity was the continued turnkey construction of the Commentry biomass cogeneration power plant for the independent French energy producer Neoen. The power plant will have 15 MWe of electrical power and 50 MWe of thermal power. The construction of the power plant has experienced delays and is scheduled to be completed during the third quarter of 2017. In view of the difficult market conditions and the group’s strategy of refocusing on businesses related to the nuclear fuel cycle, it was decided in 2015 to terminate the Bioenergy Europe operations after completion of the Commentry project and in compliance with all of AREVA’s contractual obligations, in particular as concerns warranties for operating power plants. Starting in June 2015, the staff of the entity’s two sites in France and Germany was gradually reduced. In France, employees were covered by an Employment Preservation Plan with possibilities for redeployment in the group or departure with support measures. In Germany, an equivalent plan was deployed in compliance with local procedures. The plan for a gradual exit from the business continued in 2016 and may be finalized upon the completion of the Commentry project in 2017. BIOENERGY ASIA On February 22, 2016, it was decided to shut down the Bioenergy Asia operations. A program for a gradual exit from the business and staff reduction was implemented in 2016, in compliance with AREVA’s contractual commitments. The business no longer has any projects under construction today and its operations are limited to managing warranty obligations. Full shutdown should be effective in 2017. BIOENERGY BRAZIL OnMarch 8, 2016, the personnel of Bioenergy Brazil were informed of its shutdown. A program for a gradual exit from the business and staff reduction was immediately set up, in line with the schedule for completing AREVA’s contractual commitments, in particular as concerns warranty obligations for the operating power plants. Lastly, it should be noted that in February 2016 the Bioenergy Brazil entity terminated the Campo Grande biomass power plant supply project with its customer Atico/Bolt, in compliance with the terms of the contract. As a reminder, this contract had been suspended in October 2015 in view of the customer’s difficulties in coming up with the financing for this project. Hydrogen electrolysis with PEM technology In 2016, operation continued of AREVA H2Gen, a joint venture created inMay 2014 by its shareholders AREVA Stockage d’Énergie, Smart Energies and the French Environment and Energy Management Agency (Ademe). The joint venture designs and manufactures proton exchange membrane (PEM) hydrogen electrolyzers. AREVA and its partners aim to turn it into a global leader in the hydrogen production 6.4.3.2.2. Energy storage

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2016 AREVA REFERENCE DOCUMENT